Insider Chatter by Donna Bogatin

Salil Deshpande, principal at Bay Partners joins the Facebook to rule the Web party, and he is putting his firm’s VC money where his Face his: App Factory to F8 developers rescue:

Bay is targeting tens of investments of $25,000 - $250,000; We are dedicated to supporting the entrepreneurs who are building the “killer apps” whatever they may be, for this new social OS, the Facebook Platform.

Think Big is Bay Partners slogan. How big is Bay really thinking. though? Bay Partners echoes Mark Zuckerberg in declaring that “Facebook, in essence, has become the Social Operating System,” BUT that doesen’t make it so.

Zuckerberg shrewdly gives the impression of “opening up” Facebook more and more–any hotmail email will do, F8–while Facebook can not escape the fundamentally closed, walled off structure it employs.

MySpace is friendlier and more open than Facebook; I can interact with Tom Anderson at will, not Zuckerberg though.

Facebook believes a behind the curtain mystique enhances Facebook desirabiliy and credibility; Facebook nevertheless shuts itself off from the participation–both active and passive–of millions of people around the world.

The Web is now enjoyed by 1,154,358, 778 people worldwide, according to Internet World Stats.

Facebook naturally has grown significantly since relinquishing .edu exclusivity. Triple digit increases in email registrations are not sustainable, however, and Facebook does not benefit from passive visitor usage, as MySpace does.

Facebook is servicing less than 1% of the world’s Internet users, missing 1,154,358,749 of them.

MySpace books 12% of all time spent online and over two million new profiles created weekly.

In betting millions in investors’ funds on Facebook manifest destiny, Bay Partners is wagering on a long shot.

ALSO:How Google Snares AdWords Billions and Valleywag: Lots of Ham, Where’s the Beef?

CONTACT DONNA BOGATIN